The oil ministry has formed a committee to review supply concerns after an abrupt shortage of commercial LPG cylinders triggered alarm across the hospitality sector, with restaurant associations warning that many eateries could shut down within days if supplies are not restored.
The disruption follows escalating tensions in the Middle East that have affected global fuel supply chains, including India’s LPG imports. To ensure household cooking gas availability, the government has prioritised domestic LPG supplies for households, resulting in a crunch for hotels, restaurants and other commercial establishments that depend on market-priced commercial LPG.
"For LPG supply to other non-domestic sectors, a committee of three Executive Directors (EDs) of Oil Marketing Companies (OMCs) have been constituted to review the representations for LPG supply to restaurants/hotels/other industries," the ministry said in a post on X.
India consumes about 31.3 million tonnes of LPG annually, with around 87 per cent used in the domestic sector—primarily household kitchens—and the remainder consumed by commercial establishments such as hotels and restaurants.
Of the country’s total LPG requirement, nearly 62 per cent is met through imports. However, the ongoing conflict involving US and Israeli attacks on Iran and Tehran’s retaliation has led to the closure of the Strait of Hormuz, a key maritime route through which India receives 85–90 per cent of its LPG imports from countries including Saudi Arabia.
With authorities exploring alternative sources, the limited supplies currently available have been diverted primarily to household consumption, leaving commercial establishments grappling with shortages.
Industry sources say the disruption has already begun affecting operations in major cities such as Mumbai and Bengaluru, where hotels and restaurants are finding it increasingly difficult to secure cooking gas.
Vijay Shetty, president of the India Hotels and Restaurant Association, said the shortage is spreading rapidly and could soon paralyse the sector.
While maintaining that the country has adequate fuel stocks, the ministry has in recent days directed refineries to maximise LPG output by reducing petrochemical streams and has extended the LPG refill booking cycle to 25 days from 21 days.
"In light of current geopolitical disruptions to fuel supply and constraints on supply of LPG, the ministry has issued orders to oil refineries for higher LPG production and using such extra production for domestic LPG use," the ministry said in the post on X.
"The ministry has prioritised domestic LPG supply to households and introduced a 25 day inter-booking period to avoid hoarding/black marketing." Non domestic supplies from imported LPG are being prioritised to essential non domestic sectors such as hospitals and educational institutions, it said.